It's not elected government's fault the private economy is imploding, but elected governments can and must act now to save it - and democracy - from a global depression.
I think there is a tighter frame that can be drawn around the relationship between neoclassical (vs fiscal policy) management of the economy, by focusing on income inequality and especially wage income.
I recently saw some commentary by RBC on the Canadian central bank’s 50 basis point reduction and it went something like this: “for every 1% increase in the employment rate, prices fall by .5%”. This was a comment in support of the rate cut, but is just…. I almost threw my phone across the room when I read it.
When someone gets laid off due to a “slowdown” they typically lose 50% or more of their income. Many folks are living paycheque to paycheque and this can be enough to push people out of housing onto the street. The fear of that happening is palpable.
We have arrived at this point after almost 50 years of flat wage growth adjusted for inflation, while profits have soared (as has executive compensation with professional employment close behind). This a direct result of “undoing” the fiscal and policy supports for working people in favour of corporations throughout the west but particularly in North America (and especially the US).
If ordinary people cannot afford to live without being in constant fear of losing their jobs and livelihoods they are susceptible to someone who has “all the answers” and who promises to take their fear away even if it at a loss to their liberty. A law prof I had called losing your job “corporate capital punishment” and while that is clearly hyperbole it can definitely feel like that if you lose your job.
So pursuing a “low inflation” target through the application of of a monetary policy hammer is outrageous for many reasons not least of which is the incredible human cost of wringing wage income out of the economy.
As for the impact on productivity I am not convinced that you can lay the blame for that on low interest rates. At the firm level lower interest rates reduce the rate of return required to justify purchase of new equipment or technology which generates increases to productivity across the economy.
When interest rates drop, it balloons the size of loans being offered. A 1% change in interest rates downward increases what banks will lend by $50,000 on a house - between $375,000 and $425,000. A 1% drop in interest rates can increase the price of a house by 7.5%, and houses are not productive investments. They are a personal asset that does not generate ongoing revenue.
The "real economy" cannot compete with gains like that, so investors pile into housing which continues to drive the bubble as the productive economy falters.
I wrote a paper about it that I presented at a conference in 2017.
Everywhere I looked the divergence in wage growth and inequality started around 1978. I asked myself what happened then and the answer is the adoption of anti-inflationary measures, which is all about the preservation of the relative value of existing assets, not about the creation of new ones.
In my very first post, I cited Edward Chancellor who wrote a book about this:
"Q: And you say it was wrong that central banks tried to combat this kind of deflation at all cost?
Chancellor: By aggressively pursuing an inflation target of 2% and constantly living in horror of even the mildest form of deflation, they not only gave us the ultra-low interest rates with their unintended consequences in terms of the Everything Bubble. They also facilitated a misallocation of capital of epic proportions, they created an over-financialization of the economy and a rise in indebtedness. Putting all this together, they created and abetted an environment of low productivity growth.
… By pursuing this policy of ultralow interest rates for so long, they have created a lot of fragility in the economy and the financial system. We used to refer to monetary policy after the financial crisis as «kicking the can down the road», remember? Well, they kicked the can for so long that we forgot that they were just delaying the day of reckoning. It will turn out to be largely impossible to normalize interest rates without collapsing the economy.”
Reducing interest rates has that impact in the housing market (drawing money in, inflating asset prices) and plays a role in share price “growth” as well but it doesn’t really factor into the ongoing decisions that businesses make about how to run their business (i.e., investing or not in new tech or machinery).
The other thing that happened in an around 1980 was a very visible change in policy around labour unions in both the US and Canada. It became much harder to organize, and many states in the US put “right to work” legislation in place that undermined existing unions as well. Watch also what happened to the minimum wage starting about that time. It was regularly increased through the 70’s then the increases just… stopped. With the ‘stagflation’ of the late 70’s then the run up of inflation in the early 80’s governments starting intervening directly in labour markets with “wage and price controls” that limited wage increases.
The term “wage price spiral” originated during that time and it became established opinion that wage demands “caused” inflation (“wage push” inflation). Once governments realized they could restrict wage growth through legislation they continued to do so by legislating wage growth in the public sector.
At the same time the Free Trade agreements were being negotiated largely without any protection for labour, so guys in Canada were suddenly competing with wages in Mexico, the US South, and Asia. The threat heard across the bargaining table was “this is all we can offer or else we will have to close and move”. Plants did close. In the wake of the first US/Canada agreement, for example, Heinz consolidated all of it production of everything manufactured in Canada back to plants in the US (except for baby food because Canadian regs required different nutritional content than the US).
I went through this, on both sides of the negotiating table as fate would have it. I know this is anecdotal but the pattern was repeated over and over and over… don’t discount the changes in labour market policy/trade as a major factor in depressing wage growth. Productivity growth “decoupled” from wage growth where it had been 1:1 pretty much from the end of WWII through 1978; after that, productivity increased but real wages did not.
It's insulting when Tiff Macklem says (and I'm paraphrasing), "No, I am not in the basement of the Bank of Canada printing money for the lulz." Because that isn't the accusation. The kind of damage control the Bank of Canada is doing is to raise a straw man argument. The fact is, a great number of Canadians know that our society is "printing" money (while knowing that it is in the form of data) into the accounts of people who aren't going to spend it into the real-world, life-sustaining economy. A PR strategy that treats us like we're stupid is bad for the value of that currency.
Hi Dougald, very interesting article. I'm not an economist so feel free to correct me but I was wondering if you think technological stagnation has a role to play in this?
From what I understood from your article you seemed to argue that one of the causes of the current crisis is because mortgages are safe investments for banks.
However,even if that was fixed, is it possible that investing in other productive sectors is just more risky now because we've reached some limit to innovation?
That's a great question. Technology is important, but the limit we're hitting is financial.
- Customers, and borrowers, are running out of money to pay their bills.
- Investors and lenders used debt to buy up and drive up the price of assets, and are either hollowing themselves out, or hiking prices, or both, in order to meet unrealistic returns, because they overpaid.
Economics is not a science at all - it's really a set of rules, and the rules are based on some bad assumptions.
The problem is that the policy has been that central banks keep trying to create massive "quick fixes" to the economy, by futzing around with interest rates. It creates the illusion of positive growth by encouraging speculation in assets that are *not* productive. A house you own is not a productive investment. It does not generate revenue. YOU, the mortgage holder, are the investment. So YOU have to go out and get more and more money to pay back.
Banks don't see the housing market as risky, because it is often backed and insured by governments, and because it is secured by an asset, so if the mortgage defaults, they take the house. It is all massive short-term gain for long-term pain. It also generates a lot of money and activity, including taxes for governments, so it creates the illusion of a booming economy.
Business start-ups are always risky. 50% of small businesses fail in the first five years, because that is the nature of risk taking. However, there will also always be a few businesses that succeed in the long term - but they are also undermined by high asset and property prices, which are all overhead.
So we don't see needed investment in productive, real economy businesses.
Thanks for the thorough reply. It makes a lot of sense intuitively.
If I could ask a follow-up, what assets do you think are productive? Is it new technologies, re-investing in infrastructure, replacing machines?
Also, a second question I have is more of a thought experiment, I don't actually think we've hit a technological limit.
However, if we assume the amount of technologies discovered is:
1. Fixed and somewhere between 0-100%.
2. Grows exponentially.
Wouldn't that mean that investing in technology when science is just beginning less risky (because there is a lot to discover) and then as time goes on there would be less to discover/create so investments in technology become more risky? What does the financial system look like in a world where we've discovered 90/95/100% of everything?
Thank you for this article. It is good to see German history of the 1930s portrayed accurately, rather than in a manner that agrees with someone's preconceived political ideas of what it should have been. Germany needed a FDR type figure but the arthritic political system gave us the Nazis versus KPD. My understanding of economics is fairly hopeless, read the article but did not fully understand it, please forgive me. As the disastrous 2024 US election was often stated as about Bidenomics and inflation, what should Biden have done in the post pandemic US to have avoided inflation, which was worse than elsewhere in G7?
If it's any consolation, the people who are most wrong about the economy are economists.
The inflation was world wide, and it was caused partly by oil companies (and other companies) price gouging, but the much bigger problem was the way interest rates and debt were handled.
Inflation was the irritant, but the deeper problem is that there is too much debt (also the problem causing the 1929 crash and the Depression).
The roots of the problem actually preceded Biden. It's because whenever there's a big crisis, instead of dealing with it by having governments directly put money in people's hands (fiscal spending) central banks drop interest rates to encourage more borrowing, which has created a bubble where people pay too much for investments all at once, which all go wrong all at once.
Debt relief was really important and the right thing to do, but the problem wasn't just inflation - it's the way that central banks around the world responded to it. Instead of realizing it was temporary, central banks cranked up interest rates.
That decision is what has been making people hurt, IMO.
Much too long. The "extremism" you speak of is happening because people are having their culture and identity attacked deliberately by nefarious globalist organisations. There is no comparison with Nazi Germany.
The fact that I don't need to waffle on to present my case and that I have a clearer understanding of people's feelings and emotions that drive them does not mean it is not a valid argument. Your "facts" can only take you so far. I would suggest you take a look at the reality of the situation. Your article title alone speaks volumes of your ignorance in the matter. Far-right extremism is an overused term used to dismiss concerns of valid ordinary people.
That's not an explanation based in evidence, and when you write "there is no comparison with Nazi Germany" and say "it's just people reacting because their culture and identity are being attacked by nefarious globalist organizations", you are showing that the comparison with Nazi Germany is exact.
"Globalist" is a well-known reference to an anti-semitic conspiracy theory, which is to say, scapegoating International Jewry, not the conservative politicians you voted for.
The reason people feel "under attack" is that they have lost control in their lives due to economic reasons, but don't recognize that the austere conservative economics they support and are calling for actually make the entire situation worse.
The evidence I need is having the ear of thousands of people who express how they feel and why. Your pretentious tone which puts everything down to the economy is the exact type of arrogance which makes you so disconnected from the people. Your argument is bizarre, your assertion that 'globalism' is somehow antisemitic has made it clear that you are deeply confused. I cannot imagine why you have felt compelled to write about something you have very little understanding of. May I suggest you actually speak to ordinary people, the same people you label 'far-right' - oh, and by the way, many of them had family who fought the real Nazis in WWII, which makes your nonsense all the more galling.
I absolutely understand the situation. I have a different understanding than yours.
If you are not aware of the antisemitic connotations of the term "globalist" then you should look it up. It's hardly a secret.
I am interested in accurate information.
You're here to say your opinion, and you don't want to be challenged on it.
I've backed up everything with facts and references and you want to say "their family fought the Nazis." So did mine.
I sympathize with people's suffering and I agree that they are worse off, and that's why I don't believe in austerity or cuts. They don't work and never have, and they cause murderous politics.
No one wants to believe it could have anything to do with money, the economy or their own government. I cite a study of 140 financial crises where people become more nationalist and hard right. Financial crises and austerity lead to violence and can lead to war, because people turn against each other due to the economic incompetence and ignorance of their leaders.
What you want is to be good and for other people to be bad, and for someone to do something to get rid of the bad people who are being blamed for your suffering. That's not a solution to anything. There are ways to alleviate suffering and give people back control over their lives, which are ignored because people are too busy attacking each other for something they haven't done.
More waffling, I'm afraid, which I have neither time nor inclination to argue. If you want to understand the reality of the situation, go and talk to ORDINARY British people. You'll find 'economy" somewhere lower down the list.
‘Moreover, while the hyperinflations are seen these days as an uncontrollable phenomenon, this one at least was not only deliberately provoked, it ended rather quickly with the introduction of the renten-mark, which was tied to, of all things, real estate assets. The new stable reichsmark succeeded it within a year. The next four years saw the German economy perform rather well, so long as US capital flows kept flowing. When those flows turned off in 1929, the German government abandoned the countercyclical policies it had pioneered in the 1920s, especially when its unemployment insurance scheme generated a large deficit, and reached for the austerity levers. * The Reichsbank raised interest rates to encourage capital inflows, but the flows failed to arrive given the general shortage of liquidity in Europe following the Fed's interest rate hike. The only thing that happened was that the economy tanked further. Official reserves fell precipitously, and so did the gold cover.’
I would put $$ on this being a wildly oversimplified description of the economic trends of that time lol
It’s for paying subscribers only. Not sure the exact arguments you’re going to make but looks interesting to read. I’m no expert but seems to me like people go pretty nuts during dire financial straits - excerpt below
The Austrian situation was thus being relentlessly reproduced in Germany, with the more educated classes, deprived in most cases of the right decently to live and bring up their families, becoming more and more hostile to the Republic and receptive to the forces of reaction. The consul in Frankfort reported a virulent growth of anti-Semitism.
‘It is no exaggeration to say that cultured German men and women of high social standing openly advocate the political murder of Jews as a legitimate weapon of defence. They admit, it is true, that the murder of Rathenau was of doubtful advantage ... but they say there are others who must go so that Germany shall be saved. Even in Frankfort, with a prepondering Jewish population, the movement is so strong that Jews of social standing are being asked to resign their appointments on the boards of companies.’
Erna von Pustau recalled the same trend in Hamburg, where 'stock exchange and 'Jews' were ideas very much connected in the minds of the people, and where the circumstances of a situation which no one really understood made those who had lost their savings or their fortunes ready prey for anti-Semitic propaganda. Her father began to speak against the Jews more and more, asserting now that
'creative capital is the capital we Germans have: parasitical capital is the capital of the Jews.'
"You should have known my father as he used to be,' she told her friend. The political education I had I got from him. He explained to me things against the Kaiser, and our Parlia-ment. But now he has stopped thinking and reasoning, and this will do more damage to us than it will ever do to the Jews”
The evidence suggests democracy results in mega-death. It’s a recipe for ethnic conflict. Let’s get over the idea that democracy results in good governance.
The "evidence?". Politically engineered famine in China in the late 1950s resulted in the death by starvation of over 20-million people. The Soviet Holomodor was a politically engineered starvation of several million people in Ukraine. 25 million Soviets Died fighting the Nazis, who also killed millions. There were also genocides under the Ottoman Empire. None of these are democracies. Maybe consume some actual history, not garbage by denialists and apologists like David Irving.
Great examples. Bolsheviks and Nazis both came to power under democratic systems, you know.
Democracy resulted in the levee en masse which invented modern western warfare and the 8-digit body counts that used to be exclusive to eastern despots.
It’s not disputable that the levee en masse added a zero to casualty figures in every major western conflict that’s occurred since.
The only argument is that it was inevitable, and not a product of democracy. But the French Revolution directly birthing it is pretty close to a fatal flaw for that argument.
You say the far-right only makes things worse "like after 1929 Germany", but the national socialist government that came fixed all the problems and turned Germany into the economic powerhouse of the world. So now, if all these countries go far right and imitate thr 30's German economic platform, what's the problem?
Surprised that I have to explain why Nazi Germany was bad, but it was a profoundly corrupt economic system based on threats, terror, murder and theft
Japan and Italy were also far-right, and one of the reasons their economies aren't sustainable is that instead of addressing the systemic problems with debt, economy and investment within their own borders, they grew their economies through invasion, leading to a global conflict that cost tens of millions of lives of soldiers and civilians alike.
Germany was not the economic powerhouse of the world. They put money into re-arming, not civilian projects, and one of the ways they achieved economic growth was by rounding people up, stealing their property (homes and businesses) and either putting them in work camps, killing them on the spot, confining them to a ghetto, or sending them to a death camp, which contained factories for the purpose of mass extermination.
The annexation of other countries was a form of theft.
The economy of the Soviet Union was also doing better in the 1930s, because the government murdered and starved people and took their property. The Ukrainian famine - the Holomodor was the deliberate starvation of millions of people.
In Japan, they also had a far-right goverment in the 1930s.
You might want to watch "the Nazis: a warning from history" where Germans moving into annexed territories rounded up the local Polish resident and expelled them from their houses and businesses and handed them over to the Germans moving in.
I would of appreciated a reply more rooted in pure factuality, instead of relying on myths and stereotypes... All that I am able to take away from your reply is that far-right economic principles "work" for the nation practicing it, as far as it's known in the short and medium term(because no such state survived modern western ideological cleansing to give data on the long term),, but is highly immoral in the modern world, it focuses on the prosperity of its own core population at the expense of everyone else, primarily inside, but also outside the state. Far-leftism is the same except it focuses on the prosperity of the ideology (and the state in and of itself) at the expense of everyone else.
I don't think it's factually wrong to say that 1930's far-right economic principles are fundamentally stable in the truest sense of the definition, and are inherently infinitely more stable then our modern economic quagmire, but that does not necessarily make it right.
You shouldn't be surprised that people want to know the realities of the past. If you use Santa or the boogeyman as emotional appeals to why certain things are good or bad, you will come up short when people at large reject appeals to emotion, and try to rehash old ideas when they are not logically taught (or supplied truthfully accurate facts to come to their own conclusions), that certain things don't work.
Nonetheless, I appreciate you took the time to explain your point of view for me. Thank you.
I did provide you with facts. I pointed you to a historical documentary - the Nazis a warning from history which includes first person interviews and documentary evidence starting from the 1920s on.
I’m not relying on myths. I could also point to Austerity, history of a dangerous idea by Mark Blyth, which details the right wing governments, which were characterized by violence and brutality.
Within Germany and outside it, the government achieved what it did through lies, threats, theft and murder of Germans citizens, and corruption of the police, courts and government, and the total absence of the rule of law.
There are organized crime syndicates that are highly profitable and enforce their businesses through bribery, murder, corruption, theft and intimidation. Slavery is profitable. The idea that these moral dimensions, which are absolutely not myths, are supposed to be ignored if they generate excess revenue for a few people at the top, is fundamentally corrupt and morally bankrupt.
In the end, the result was not prosperity for Germany, but devastation and destruction because people quite rightly did not want to live under a regime for whom liquidation of populations for profit was the business model.
The expansion into the Sudetenland meant that people were forced out and their homes and businesses were handed to newly arrived Germans. The deliberate slaughter of poles and Jews as Germany invaded Ukraine and the Soviet Union meant murdering millions of civilians for the purpose of handing over their homes and businesses.
If you think that these are somehow myths, all I can say is that you have been missing out on highly relevant history which is readily available.
Extreme right and extreme left not only share similar “trickle down” economics, they both reject the rule of law, which means independent courts and laws that apply to everyone.
I don’t know what the basis for your claims are. The lesson to be drawn is that austerity is a failure that leads to brutal regimes that create shocking misery before they collapse or are overthrown if the German economy were such a success, German Generals would and others would bot have been planning and planning executing assassination attempts.
My point being, if there is a "peaceful transition of power", as one age gives in to the next age, instead of resisting out of fear, spite, ego. Allows for the least suffering for all. By taking stalwart actions to preserve an already dead system, you basically ensure the nightmares of the future come to roost.
I had written you a very long comment, but the application crashed, so I will rewrite it again but much much shorter.
The liberal worldview which has permeated the west since the age of enlightenment, is obviously nearing its end. It's an outdated modem of thought that time has wasted away, those who have continued to extend the shelf-life of liberalism over the hundreds of years, have done so by metaphorically tacking more and more things to it. More arms, more legs, more heads, and now we have come to the point where we have created a large monster, who has been insofar docile, but increasingly savage... People are starting to push back against this monster, and the question is, and the final question for liberalism is, do we give the beast, teeth? Or do we put him down while we still have control over it?.. Weaponizing the liberal monster is to set him free from his cage to ravage the populous until it is killed, or dies of exhaustion.
What this intense metaphor explains in allegory is the possible outcomes of liberalism, or rather, the current world order. Arguing microcosm points about debts, economies, etc. Is sort of pointless. Liberalism is going to die and everyone knows it... The people know, and what causes fear in liberally minded people. Is if this beast dies, what sort of new monster will be created in its wake, often referencing the far-right and 1930s Germany attempt at eliminating the liberal worldview from the world. Things that are atrocities to liberals, were not atrocities to the national socialists worldview.
The liberals might be inclined to give their liberal beast teeth, as a self-preservation instinct, a reaction to what seems fated to take place should they not act, but in doing so they violate their own liberalist worldview. They have to themselves violate peoples liberty to stop liberalism from being dismantled wholesale.. What follows is liberals becoming antithetical to their core to retain power. They become the mythologized Hitler they hate, and then liberalism dies anyways.
What are you talking about? I am not arguing for a persistence of the status quo, which is not liberal, I am calling for a renewal of it.
The single most successful economic period in history, the so-called "Golden age of capitalism" was after World War II. It was defined by liberal economics.
You wanted me to come up with facts and complained about myths and you want to talk in metaphors, which tells me you're not interested in history, or facts, or the law, or money, or deprivation, or all the things that actually define social relations, that make the difference between whether people can eat, or work, or whether they will go to way.
The Germans boosted their economy in the 1930s by running deficits to re-arm for the purpose of invading other countries, which they did.
Who are these "liberal monsters". Voltaire? Lincoln? Theodore Roosevelt?
The "liberal" in liberal democracy refers to a commitment to individual freedom, protected by rights and the rule of law. The rule of law is the principle that the law applies to everyone. That is something that has been gained and lost and regained for centuries.
You are not presenting an argument.
The atrocities committed by the Nazis were reviled by human beings all over the world. There are concrete examples, backed up by lots of paperwork and lots of dead bodies. There is a reason they kept their actions secret and unknown to the world, as they gathered up people in their millions and baked them in ovens. There is a reason Hitler's generals tried multiple times to assassinate him. There's a reason why Hitler and his men all blew their brains out. It wasn't because they thought that what they were doing was moral.
Money, and debts and economies are how societies organize themselves, and they affect the actions of every single person in a society, because they make the difference between whether people can eat or not. Economic crises lead to war, and theft.
Liberalism at its core it not an economic philosophy at all, it is the preservation of individual liberty whether it is threatened by the public actors of the state, or by corporate actors. It is the capacity of individuals to be free and have access to justice.
As far as liberal democracy failing, it is not liberalism that has driven us to this point. It is not "big government" or welfare programs.
The dominant economic ideology is not liberalism, and it has not been since the 1970s.
Since the 1970s, we have had "neoliberalism" as an economic ideology, which is a far right-wing, libertarian set of economic formulas whose basic principle is to give all the money to the people at the top, which they have done. That is when incomes started diverging in the United States and elsewhere around the world.
Keynesian liberal policies are flat out outlawed in many juridictions. The Maastricht Treaty and balanced budget laws basically make liberal economics illegal.
The direct result of those economic policies has been greater and greater concentration of wealth and income among a few, while the rest have been left behind. Not due to liberal policies, but to right-wing fiscally conservative ones, because of austerity and central bank policies that have bailed out banks with trillions in printed money while everyone else goes begging.
Alan Greenspan was Chairman of the Federal Reserve, and was an acolyte of Ayn Rand. He was not a liberal.
I read the entire thing and it made my now generally unused brain hurt - for lack of exercise on my part, not due to the content.
I was not familiar with you, so you got Googled. A former Manitoba "big L", liberal politician! I don't mean that as an insult, rather it was quite refreshing to see a politician with a well thought out, historically accurate take on the world economy, with some good solid ideas to get us out of this mess. I have to ask, what prompted you to go into a profession not known for great intellects?
It was actually that I have been concerned about the coming crisis for over a decade, and I wanted to be in a position to at least speak out. Also that despite the general rottenness of politics, the only way to change is to get involved.
"You're a better man than I am, Gunga Din." I have worked hard, and sometimes succeeded, to right some wrongs in my local community, including fighting to keep our local hospital from being gutted and turned into a long term care facility, but all of it mostly under the radar. Brave to expose yourself to the nastiness in politics!
While I appreciate feedback on my posts, I also expect people to back up their arguments with facts. Inequality has been growing and it is the worst it has ever been in many countries.
A fallacy is an error in thinking. Whether inequality is increasing in most high income countries or not is matter of evidence - and it is absolutely increasing. In many cases, it is the highest it has ever been.
If you are going to make those claims, back them up/
I think there is a tighter frame that can be drawn around the relationship between neoclassical (vs fiscal policy) management of the economy, by focusing on income inequality and especially wage income.
I recently saw some commentary by RBC on the Canadian central bank’s 50 basis point reduction and it went something like this: “for every 1% increase in the employment rate, prices fall by .5%”. This was a comment in support of the rate cut, but is just…. I almost threw my phone across the room when I read it.
When someone gets laid off due to a “slowdown” they typically lose 50% or more of their income. Many folks are living paycheque to paycheque and this can be enough to push people out of housing onto the street. The fear of that happening is palpable.
We have arrived at this point after almost 50 years of flat wage growth adjusted for inflation, while profits have soared (as has executive compensation with professional employment close behind). This a direct result of “undoing” the fiscal and policy supports for working people in favour of corporations throughout the west but particularly in North America (and especially the US).
If ordinary people cannot afford to live without being in constant fear of losing their jobs and livelihoods they are susceptible to someone who has “all the answers” and who promises to take their fear away even if it at a loss to their liberty. A law prof I had called losing your job “corporate capital punishment” and while that is clearly hyperbole it can definitely feel like that if you lose your job.
So pursuing a “low inflation” target through the application of of a monetary policy hammer is outrageous for many reasons not least of which is the incredible human cost of wringing wage income out of the economy.
As for the impact on productivity I am not convinced that you can lay the blame for that on low interest rates. At the firm level lower interest rates reduce the rate of return required to justify purchase of new equipment or technology which generates increases to productivity across the economy.
When interest rates drop, it balloons the size of loans being offered. A 1% change in interest rates downward increases what banks will lend by $50,000 on a house - between $375,000 and $425,000. A 1% drop in interest rates can increase the price of a house by 7.5%, and houses are not productive investments. They are a personal asset that does not generate ongoing revenue.
The "real economy" cannot compete with gains like that, so investors pile into housing which continues to drive the bubble as the productive economy falters.
I wrote a paper about it that I presented at a conference in 2017.
Everywhere I looked the divergence in wage growth and inequality started around 1978. I asked myself what happened then and the answer is the adoption of anti-inflationary measures, which is all about the preservation of the relative value of existing assets, not about the creation of new ones.
In my very first post, I cited Edward Chancellor who wrote a book about this:
"Q: And you say it was wrong that central banks tried to combat this kind of deflation at all cost?
Chancellor: By aggressively pursuing an inflation target of 2% and constantly living in horror of even the mildest form of deflation, they not only gave us the ultra-low interest rates with their unintended consequences in terms of the Everything Bubble. They also facilitated a misallocation of capital of epic proportions, they created an over-financialization of the economy and a rise in indebtedness. Putting all this together, they created and abetted an environment of low productivity growth.
… By pursuing this policy of ultralow interest rates for so long, they have created a lot of fragility in the economy and the financial system. We used to refer to monetary policy after the financial crisis as «kicking the can down the road», remember? Well, they kicked the can for so long that we forgot that they were just delaying the day of reckoning. It will turn out to be largely impossible to normalize interest rates without collapsing the economy.”
Thanks for the reply, Dougald!
Reducing interest rates has that impact in the housing market (drawing money in, inflating asset prices) and plays a role in share price “growth” as well but it doesn’t really factor into the ongoing decisions that businesses make about how to run their business (i.e., investing or not in new tech or machinery).
The other thing that happened in an around 1980 was a very visible change in policy around labour unions in both the US and Canada. It became much harder to organize, and many states in the US put “right to work” legislation in place that undermined existing unions as well. Watch also what happened to the minimum wage starting about that time. It was regularly increased through the 70’s then the increases just… stopped. With the ‘stagflation’ of the late 70’s then the run up of inflation in the early 80’s governments starting intervening directly in labour markets with “wage and price controls” that limited wage increases.
The term “wage price spiral” originated during that time and it became established opinion that wage demands “caused” inflation (“wage push” inflation). Once governments realized they could restrict wage growth through legislation they continued to do so by legislating wage growth in the public sector.
At the same time the Free Trade agreements were being negotiated largely without any protection for labour, so guys in Canada were suddenly competing with wages in Mexico, the US South, and Asia. The threat heard across the bargaining table was “this is all we can offer or else we will have to close and move”. Plants did close. In the wake of the first US/Canada agreement, for example, Heinz consolidated all of it production of everything manufactured in Canada back to plants in the US (except for baby food because Canadian regs required different nutritional content than the US).
I went through this, on both sides of the negotiating table as fate would have it. I know this is anecdotal but the pattern was repeated over and over and over… don’t discount the changes in labour market policy/trade as a major factor in depressing wage growth. Productivity growth “decoupled” from wage growth where it had been 1:1 pretty much from the end of WWII through 1978; after that, productivity increased but real wages did not.
It's insulting when Tiff Macklem says (and I'm paraphrasing), "No, I am not in the basement of the Bank of Canada printing money for the lulz." Because that isn't the accusation. The kind of damage control the Bank of Canada is doing is to raise a straw man argument. The fact is, a great number of Canadians know that our society is "printing" money (while knowing that it is in the form of data) into the accounts of people who aren't going to spend it into the real-world, life-sustaining economy. A PR strategy that treats us like we're stupid is bad for the value of that currency.
Hi Dougald, very interesting article. I'm not an economist so feel free to correct me but I was wondering if you think technological stagnation has a role to play in this?
From what I understood from your article you seemed to argue that one of the causes of the current crisis is because mortgages are safe investments for banks.
However,even if that was fixed, is it possible that investing in other productive sectors is just more risky now because we've reached some limit to innovation?
That's a great question. Technology is important, but the limit we're hitting is financial.
- Customers, and borrowers, are running out of money to pay their bills.
- Investors and lenders used debt to buy up and drive up the price of assets, and are either hollowing themselves out, or hiking prices, or both, in order to meet unrealistic returns, because they overpaid.
Economics is not a science at all - it's really a set of rules, and the rules are based on some bad assumptions.
The problem is that the policy has been that central banks keep trying to create massive "quick fixes" to the economy, by futzing around with interest rates. It creates the illusion of positive growth by encouraging speculation in assets that are *not* productive. A house you own is not a productive investment. It does not generate revenue. YOU, the mortgage holder, are the investment. So YOU have to go out and get more and more money to pay back.
Banks don't see the housing market as risky, because it is often backed and insured by governments, and because it is secured by an asset, so if the mortgage defaults, they take the house. It is all massive short-term gain for long-term pain. It also generates a lot of money and activity, including taxes for governments, so it creates the illusion of a booming economy.
Business start-ups are always risky. 50% of small businesses fail in the first five years, because that is the nature of risk taking. However, there will also always be a few businesses that succeed in the long term - but they are also undermined by high asset and property prices, which are all overhead.
So we don't see needed investment in productive, real economy businesses.
Thanks for the thorough reply. It makes a lot of sense intuitively.
If I could ask a follow-up, what assets do you think are productive? Is it new technologies, re-investing in infrastructure, replacing machines?
Also, a second question I have is more of a thought experiment, I don't actually think we've hit a technological limit.
However, if we assume the amount of technologies discovered is:
1. Fixed and somewhere between 0-100%.
2. Grows exponentially.
Wouldn't that mean that investing in technology when science is just beginning less risky (because there is a lot to discover) and then as time goes on there would be less to discover/create so investments in technology become more risky? What does the financial system look like in a world where we've discovered 90/95/100% of everything?
Thank you for this article. It is good to see German history of the 1930s portrayed accurately, rather than in a manner that agrees with someone's preconceived political ideas of what it should have been. Germany needed a FDR type figure but the arthritic political system gave us the Nazis versus KPD. My understanding of economics is fairly hopeless, read the article but did not fully understand it, please forgive me. As the disastrous 2024 US election was often stated as about Bidenomics and inflation, what should Biden have done in the post pandemic US to have avoided inflation, which was worse than elsewhere in G7?
If it's any consolation, the people who are most wrong about the economy are economists.
The inflation was world wide, and it was caused partly by oil companies (and other companies) price gouging, but the much bigger problem was the way interest rates and debt were handled.
Inflation was the irritant, but the deeper problem is that there is too much debt (also the problem causing the 1929 crash and the Depression).
The roots of the problem actually preceded Biden. It's because whenever there's a big crisis, instead of dealing with it by having governments directly put money in people's hands (fiscal spending) central banks drop interest rates to encourage more borrowing, which has created a bubble where people pay too much for investments all at once, which all go wrong all at once.
Debt relief was really important and the right thing to do, but the problem wasn't just inflation - it's the way that central banks around the world responded to it. Instead of realizing it was temporary, central banks cranked up interest rates.
That decision is what has been making people hurt, IMO.
Much too long. The "extremism" you speak of is happening because people are having their culture and identity attacked deliberately by nefarious globalist organisations. There is no comparison with Nazi Germany.
This is not an argument. It’s a statement of your opinions unsupported by fact.
The fact that I don't need to waffle on to present my case and that I have a clearer understanding of people's feelings and emotions that drive them does not mean it is not a valid argument. Your "facts" can only take you so far. I would suggest you take a look at the reality of the situation. Your article title alone speaks volumes of your ignorance in the matter. Far-right extremism is an overused term used to dismiss concerns of valid ordinary people.
That's not an explanation based in evidence, and when you write "there is no comparison with Nazi Germany" and say "it's just people reacting because their culture and identity are being attacked by nefarious globalist organizations", you are showing that the comparison with Nazi Germany is exact.
"Globalist" is a well-known reference to an anti-semitic conspiracy theory, which is to say, scapegoating International Jewry, not the conservative politicians you voted for.
The reason people feel "under attack" is that they have lost control in their lives due to economic reasons, but don't recognize that the austere conservative economics they support and are calling for actually make the entire situation worse.
The evidence I need is having the ear of thousands of people who express how they feel and why. Your pretentious tone which puts everything down to the economy is the exact type of arrogance which makes you so disconnected from the people. Your argument is bizarre, your assertion that 'globalism' is somehow antisemitic has made it clear that you are deeply confused. I cannot imagine why you have felt compelled to write about something you have very little understanding of. May I suggest you actually speak to ordinary people, the same people you label 'far-right' - oh, and by the way, many of them had family who fought the real Nazis in WWII, which makes your nonsense all the more galling.
I absolutely understand the situation. I have a different understanding than yours.
If you are not aware of the antisemitic connotations of the term "globalist" then you should look it up. It's hardly a secret.
I am interested in accurate information.
You're here to say your opinion, and you don't want to be challenged on it.
I've backed up everything with facts and references and you want to say "their family fought the Nazis." So did mine.
I sympathize with people's suffering and I agree that they are worse off, and that's why I don't believe in austerity or cuts. They don't work and never have, and they cause murderous politics.
No one wants to believe it could have anything to do with money, the economy or their own government. I cite a study of 140 financial crises where people become more nationalist and hard right. Financial crises and austerity lead to violence and can lead to war, because people turn against each other due to the economic incompetence and ignorance of their leaders.
What you want is to be good and for other people to be bad, and for someone to do something to get rid of the bad people who are being blamed for your suffering. That's not a solution to anything. There are ways to alleviate suffering and give people back control over their lives, which are ignored because people are too busy attacking each other for something they haven't done.
https://open.substack.com/pub/dougaldlamont/p/what-would-jesus-do-christs-biblical?r=9gk0j&utm_campaign=post&utm_medium=web&showWelcomeOnShare=false
More waffling, I'm afraid, which I have neither time nor inclination to argue. If you want to understand the reality of the situation, go and talk to ORDINARY British people. You'll find 'economy" somewhere lower down the list.
‘Moreover, while the hyperinflations are seen these days as an uncontrollable phenomenon, this one at least was not only deliberately provoked, it ended rather quickly with the introduction of the renten-mark, which was tied to, of all things, real estate assets. The new stable reichsmark succeeded it within a year. The next four years saw the German economy perform rather well, so long as US capital flows kept flowing. When those flows turned off in 1929, the German government abandoned the countercyclical policies it had pioneered in the 1920s, especially when its unemployment insurance scheme generated a large deficit, and reached for the austerity levers. * The Reichsbank raised interest rates to encourage capital inflows, but the flows failed to arrive given the general shortage of liquidity in Europe following the Fed's interest rate hike. The only thing that happened was that the economy tanked further. Official reserves fell precipitously, and so did the gold cover.’
I would put $$ on this being a wildly oversimplified description of the economic trends of that time lol
I wrote about it in another link but the rest of the economy and business decisions happen within the financial structure. The generally accepted history of hyperinflation around this period is wrong, as I wrote here: https://email.mg1.substack.com/c/eJxcksuu4yoQRb8GZol4xK8BgytF-Q2rDGUHXV6Colv--1aSc9Q6PWGwSsDeS2WB8Mj1NCU3ulQESz4n7oyYlJ02jkZOWs6LlNPAMYIP64EJKxC6Fejv9LYIzZ9mc8s0D8O4jMrBsOEOIywwbaA2ITXcuDdKKC2FnOWghV6u-rpM0iq97zeYh3Fy8_XIg_C5DOwm4iGvrW-NwP5_tTly39a94juJodqRB_MkKo3p_5h6MPVwuR8QXICYE_24y9SjMPWgJ16evlGu5yXvl-dZsPq0B3g1v_jE9KNTXC3EAv5ITN-_tTA1viYRne-R6fs7xRdsuVeLTN-_f_ziNifCREzfX4b561ihO4_JoskpnGsB7z7cOyP1LEY5T_pD6CxoEv5uAYmw8tK31eYYe_J0rphgC-g-HkrfgrfvEq-HlJBiGBdejds_LthNeBtyd2-PrW8uR_DJ_BDG6Z9N6A3rO9gwz_MyLfyXUX8CAAD__w2ewa0
This is paywalled so I can’t read it. Im currently reading the book ‘When Money Dies’
Hm. Shouldn't be paywalled. Here's an alternate link
https://open.substack.com/pub/dougaldlamont/p/the-history-of-hyperinflation-in?r=9gk0j&utm_campaign=post&utm_medium=web&showWelcomeOnShare=false
It’s for paying subscribers only. Not sure the exact arguments you’re going to make but looks interesting to read. I’m no expert but seems to me like people go pretty nuts during dire financial straits - excerpt below
The Austrian situation was thus being relentlessly reproduced in Germany, with the more educated classes, deprived in most cases of the right decently to live and bring up their families, becoming more and more hostile to the Republic and receptive to the forces of reaction. The consul in Frankfort reported a virulent growth of anti-Semitism.
‘It is no exaggeration to say that cultured German men and women of high social standing openly advocate the political murder of Jews as a legitimate weapon of defence. They admit, it is true, that the murder of Rathenau was of doubtful advantage ... but they say there are others who must go so that Germany shall be saved. Even in Frankfort, with a prepondering Jewish population, the movement is so strong that Jews of social standing are being asked to resign their appointments on the boards of companies.’
Erna von Pustau recalled the same trend in Hamburg, where 'stock exchange and 'Jews' were ideas very much connected in the minds of the people, and where the circumstances of a situation which no one really understood made those who had lost their savings or their fortunes ready prey for anti-Semitic propaganda. Her father began to speak against the Jews more and more, asserting now that
'creative capital is the capital we Germans have: parasitical capital is the capital of the Jews.'
"You should have known my father as he used to be,' she told her friend. The political education I had I got from him. He explained to me things against the Kaiser, and our Parlia-ment. But now he has stopped thinking and reasoning, and this will do more damage to us than it will ever do to the Jews”
The evidence suggests democracy results in mega-death. It’s a recipe for ethnic conflict. Let’s get over the idea that democracy results in good governance.
The "evidence?". Politically engineered famine in China in the late 1950s resulted in the death by starvation of over 20-million people. The Soviet Holomodor was a politically engineered starvation of several million people in Ukraine. 25 million Soviets Died fighting the Nazis, who also killed millions. There were also genocides under the Ottoman Empire. None of these are democracies. Maybe consume some actual history, not garbage by denialists and apologists like David Irving.
Great examples. Bolsheviks and Nazis both came to power under democratic systems, you know.
Democracy resulted in the levee en masse which invented modern western warfare and the 8-digit body counts that used to be exclusive to eastern despots.
You may want to re-examine causality and history there.
It’s not disputable that the levee en masse added a zero to casualty figures in every major western conflict that’s occurred since.
The only argument is that it was inevitable, and not a product of democracy. But the French Revolution directly birthing it is pretty close to a fatal flaw for that argument.
The reign of terror? The Russian Revolution? These are not good arguments.
You say the far-right only makes things worse "like after 1929 Germany", but the national socialist government that came fixed all the problems and turned Germany into the economic powerhouse of the world. So now, if all these countries go far right and imitate thr 30's German economic platform, what's the problem?
Surprised that I have to explain why Nazi Germany was bad, but it was a profoundly corrupt economic system based on threats, terror, murder and theft
Japan and Italy were also far-right, and one of the reasons their economies aren't sustainable is that instead of addressing the systemic problems with debt, economy and investment within their own borders, they grew their economies through invasion, leading to a global conflict that cost tens of millions of lives of soldiers and civilians alike.
Germany was not the economic powerhouse of the world. They put money into re-arming, not civilian projects, and one of the ways they achieved economic growth was by rounding people up, stealing their property (homes and businesses) and either putting them in work camps, killing them on the spot, confining them to a ghetto, or sending them to a death camp, which contained factories for the purpose of mass extermination.
The annexation of other countries was a form of theft.
The economy of the Soviet Union was also doing better in the 1930s, because the government murdered and starved people and took their property. The Ukrainian famine - the Holomodor was the deliberate starvation of millions of people.
In Japan, they also had a far-right goverment in the 1930s.
You might want to watch "the Nazis: a warning from history" where Germans moving into annexed territories rounded up the local Polish resident and expelled them from their houses and businesses and handed them over to the Germans moving in.
https://watchdocumentaries.com/the-nazis-a-warning-from-history/
I would of appreciated a reply more rooted in pure factuality, instead of relying on myths and stereotypes... All that I am able to take away from your reply is that far-right economic principles "work" for the nation practicing it, as far as it's known in the short and medium term(because no such state survived modern western ideological cleansing to give data on the long term),, but is highly immoral in the modern world, it focuses on the prosperity of its own core population at the expense of everyone else, primarily inside, but also outside the state. Far-leftism is the same except it focuses on the prosperity of the ideology (and the state in and of itself) at the expense of everyone else.
I don't think it's factually wrong to say that 1930's far-right economic principles are fundamentally stable in the truest sense of the definition, and are inherently infinitely more stable then our modern economic quagmire, but that does not necessarily make it right.
You shouldn't be surprised that people want to know the realities of the past. If you use Santa or the boogeyman as emotional appeals to why certain things are good or bad, you will come up short when people at large reject appeals to emotion, and try to rehash old ideas when they are not logically taught (or supplied truthfully accurate facts to come to their own conclusions), that certain things don't work.
Nonetheless, I appreciate you took the time to explain your point of view for me. Thank you.
I did provide you with facts. I pointed you to a historical documentary - the Nazis a warning from history which includes first person interviews and documentary evidence starting from the 1920s on.
I’m not relying on myths. I could also point to Austerity, history of a dangerous idea by Mark Blyth, which details the right wing governments, which were characterized by violence and brutality.
Within Germany and outside it, the government achieved what it did through lies, threats, theft and murder of Germans citizens, and corruption of the police, courts and government, and the total absence of the rule of law.
There are organized crime syndicates that are highly profitable and enforce their businesses through bribery, murder, corruption, theft and intimidation. Slavery is profitable. The idea that these moral dimensions, which are absolutely not myths, are supposed to be ignored if they generate excess revenue for a few people at the top, is fundamentally corrupt and morally bankrupt.
In the end, the result was not prosperity for Germany, but devastation and destruction because people quite rightly did not want to live under a regime for whom liquidation of populations for profit was the business model.
The expansion into the Sudetenland meant that people were forced out and their homes and businesses were handed to newly arrived Germans. The deliberate slaughter of poles and Jews as Germany invaded Ukraine and the Soviet Union meant murdering millions of civilians for the purpose of handing over their homes and businesses.
If you think that these are somehow myths, all I can say is that you have been missing out on highly relevant history which is readily available.
Extreme right and extreme left not only share similar “trickle down” economics, they both reject the rule of law, which means independent courts and laws that apply to everyone.
I don’t know what the basis for your claims are. The lesson to be drawn is that austerity is a failure that leads to brutal regimes that create shocking misery before they collapse or are overthrown if the German economy were such a success, German Generals would and others would bot have been planning and planning executing assassination attempts.
You may want to expand your reading of history.
My point being, if there is a "peaceful transition of power", as one age gives in to the next age, instead of resisting out of fear, spite, ego. Allows for the least suffering for all. By taking stalwart actions to preserve an already dead system, you basically ensure the nightmares of the future come to roost.
I had written you a very long comment, but the application crashed, so I will rewrite it again but much much shorter.
The liberal worldview which has permeated the west since the age of enlightenment, is obviously nearing its end. It's an outdated modem of thought that time has wasted away, those who have continued to extend the shelf-life of liberalism over the hundreds of years, have done so by metaphorically tacking more and more things to it. More arms, more legs, more heads, and now we have come to the point where we have created a large monster, who has been insofar docile, but increasingly savage... People are starting to push back against this monster, and the question is, and the final question for liberalism is, do we give the beast, teeth? Or do we put him down while we still have control over it?.. Weaponizing the liberal monster is to set him free from his cage to ravage the populous until it is killed, or dies of exhaustion.
What this intense metaphor explains in allegory is the possible outcomes of liberalism, or rather, the current world order. Arguing microcosm points about debts, economies, etc. Is sort of pointless. Liberalism is going to die and everyone knows it... The people know, and what causes fear in liberally minded people. Is if this beast dies, what sort of new monster will be created in its wake, often referencing the far-right and 1930s Germany attempt at eliminating the liberal worldview from the world. Things that are atrocities to liberals, were not atrocities to the national socialists worldview.
The liberals might be inclined to give their liberal beast teeth, as a self-preservation instinct, a reaction to what seems fated to take place should they not act, but in doing so they violate their own liberalist worldview. They have to themselves violate peoples liberty to stop liberalism from being dismantled wholesale.. What follows is liberals becoming antithetical to their core to retain power. They become the mythologized Hitler they hate, and then liberalism dies anyways.
What are you talking about? I am not arguing for a persistence of the status quo, which is not liberal, I am calling for a renewal of it.
The single most successful economic period in history, the so-called "Golden age of capitalism" was after World War II. It was defined by liberal economics.
You wanted me to come up with facts and complained about myths and you want to talk in metaphors, which tells me you're not interested in history, or facts, or the law, or money, or deprivation, or all the things that actually define social relations, that make the difference between whether people can eat, or work, or whether they will go to way.
The Germans boosted their economy in the 1930s by running deficits to re-arm for the purpose of invading other countries, which they did.
Who are these "liberal monsters". Voltaire? Lincoln? Theodore Roosevelt?
The "liberal" in liberal democracy refers to a commitment to individual freedom, protected by rights and the rule of law. The rule of law is the principle that the law applies to everyone. That is something that has been gained and lost and regained for centuries.
You are not presenting an argument.
The atrocities committed by the Nazis were reviled by human beings all over the world. There are concrete examples, backed up by lots of paperwork and lots of dead bodies. There is a reason they kept their actions secret and unknown to the world, as they gathered up people in their millions and baked them in ovens. There is a reason Hitler's generals tried multiple times to assassinate him. There's a reason why Hitler and his men all blew their brains out. It wasn't because they thought that what they were doing was moral.
Money, and debts and economies are how societies organize themselves, and they affect the actions of every single person in a society, because they make the difference between whether people can eat or not. Economic crises lead to war, and theft.
Liberalism at its core it not an economic philosophy at all, it is the preservation of individual liberty whether it is threatened by the public actors of the state, or by corporate actors. It is the capacity of individuals to be free and have access to justice.
As far as liberal democracy failing, it is not liberalism that has driven us to this point. It is not "big government" or welfare programs.
The dominant economic ideology is not liberalism, and it has not been since the 1970s.
Since the 1970s, we have had "neoliberalism" as an economic ideology, which is a far right-wing, libertarian set of economic formulas whose basic principle is to give all the money to the people at the top, which they have done. That is when incomes started diverging in the United States and elsewhere around the world.
Keynesian liberal policies are flat out outlawed in many juridictions. The Maastricht Treaty and balanced budget laws basically make liberal economics illegal.
The direct result of those economic policies has been greater and greater concentration of wealth and income among a few, while the rest have been left behind. Not due to liberal policies, but to right-wing fiscally conservative ones, because of austerity and central bank policies that have bailed out banks with trillions in printed money while everyone else goes begging.
Alan Greenspan was Chairman of the Federal Reserve, and was an acolyte of Ayn Rand. He was not a liberal.
Far right extremism? Lol! Where?!
I read the entire thing and it made my now generally unused brain hurt - for lack of exercise on my part, not due to the content.
I was not familiar with you, so you got Googled. A former Manitoba "big L", liberal politician! I don't mean that as an insult, rather it was quite refreshing to see a politician with a well thought out, historically accurate take on the world economy, with some good solid ideas to get us out of this mess. I have to ask, what prompted you to go into a profession not known for great intellects?
It was actually that I have been concerned about the coming crisis for over a decade, and I wanted to be in a position to at least speak out. Also that despite the general rottenness of politics, the only way to change is to get involved.
"You're a better man than I am, Gunga Din." I have worked hard, and sometimes succeeded, to right some wrongs in my local community, including fighting to keep our local hospital from being gutted and turned into a long term care facility, but all of it mostly under the radar. Brave to expose yourself to the nastiness in politics!
I came from a family who grew up in the Depression, and who understood the law, politics, and the economy.
Superficially persuasive but many fallacies. For example inequality is not increasing in most high income countries. Be sceptical.
While I appreciate feedback on my posts, I also expect people to back up their arguments with facts. Inequality has been growing and it is the worst it has ever been in many countries.
A fallacy is an error in thinking. Whether inequality is increasing in most high income countries or not is matter of evidence - and it is absolutely increasing. In many cases, it is the highest it has ever been.
If you are going to make those claims, back them up/
“ We need a Marshal Plan to rescue democracy.” should be the title for this article, Dougald!
In the context of the US election result we are racing headlong into the worst of all possible worlds.